Income Taxes
About
Current Tax and Deferred Tax
The accounting standards IAS 12 / Ind AS 12 / AS 22 – Income taxes require entities to recognize current and deferred tax and present certain disclosures in their financial statements.
Current tax is the income tax payable/recoverable in respect of the current period’s taxable profit/loss. Deferred tax is the income tax payable/recoverable in respect of future periods.
At a broad level, the
accounting standard
requires entities to :
Determine the tax base of assets/liabilities
Identify temporary differences
Determine if an exemption applies
Measure deferred taxes using enacted
or substantively enacted tax rates
Recognize deferred taxes
Present disclosures
DTAX automates current and deferred tax accounting and its corresponding disclosures required as per IAS 12 / Ind AS 12 / AS 22 – Income Taxes. Most importantly, effective tax rate reconciliation is completely automated by DTAX
Current Challenges
Currently, entities devote a significant amount of time and effort to current and deferred tax computation using spreadsheets. These entities face numerous challenges during this process in the absence of a robust and automated solution.
DTAX helps to overcome these challenges by streamlining the entire process of current and deferred tax calculations and disclosures in compliance with IFRS / Ind AS / AS.
DTAX Workflow
DTAX simplifies the entire current tax and deferred tax calculation process by following a 5-STEP model.
Upload Trial Balance
at entity level
Enter current tax adjustments
(not part of TB) in predefined template
Compute taxable income
and current tax
Deferred Tax is
auto computed.
Download calculations
and disclosures.
Create an entity, define
GAAP and update masters
Enter opening balances
(one time activity)
Enter current tax adjustments
and compute current tax
Enter accounting base
and compute deferred tax
Download journal entries
and disclosures
Why
To streamline your process of current and deferred tax calculations and overcome challenges in the same, you have reached the right place – as DTAX comes loaded with key features like:
